Vietnam News

Vietnam to miss 2017 growth target: WB

The World
Bank (WB) released its Global Economic Prospects report on June 4, forecasting
a global 2017 economic growth rate of 2.7 percent and a Vietnamese growth rate
of 6.3 percent, lower than the 6.7 percent goal set by the government.

In Vietnam, strong exports are projected to help growth sustain itself at
slightly below 6.5 percent this year, according to WB’s report.

After a period of financial market volatility in late 2016, global finance
conditions have improved in 2017. Although real credit growth generally
moderated on tighter regulations and higher inflation, it remained high in Vietnam
and China.

The withdrawal of the United States from the Trans Pacific Partnership (TPP),
however, could potentially withhold significant growth opportunities from
Vietnam. Changing trade policies would also affect certain economies in the
Asia Pacific region, namely those with sizable exports to developed economies
such as Vietnam, Cambodia, China, Malaysia and Thailand.

As manufacturing and trade pick up, market confidence rises, and commodity
prices stabilise, advanced economies’ growth will accelerate to 1.9 percent in
2017, which also will benefit developed countries’ trading partners. Meanwhile,
emerging markets’ and developing economies’ growth will increase to 4.1 percent
this year from 2016 number of 3.5 percent.

“With a fragile but real recovery now underway, countries should seize this
moment to undertake institutional and market reforms that can attract private
investment to help sustain growth in the long term. Countries must also
continue to invest in people and build resilience against overlapping
challenges, including climate change, conflict, forced displacement, famine and
disease,” said Jim Yong Kim, World Bank Group President.

In late March, the General Statistics Office of Vietnam announced that the
country’s first quarter GDP growth was 5.1 percent from the same period in
2016. This slow growth is attributed to the manufacturing sector’s
underperformance. As such, the low percentage of this year’s first quarter
means a potential challenge to the National Assembly’s goal of a 6.7 percent
GDP growth rate by the end of 2017.

Nonetheless, Vietnam Institute for Economic and Policy Research predicts that
with a gradual increase in each quarter’s GDP growth rate, the goal is still
attainable.-VNA